President Trump and China's President Xi Jinping shake hands after making joint statements. Photo: Reuters/Damir Sagolj
US President Donald Trump and China's President Xi Jinping shake hands after making joint statements at the Great Hall of the People in Beijing on November 10, 2017. Photo: Reuters/Damir Sagolj

US President Donald Trump’s first series of long-promised tariffs on imported products came on Tuesday, underwhelming markets, with even directly affected firms shrugging off the decision.

Bloomberg reports on the minimal impact of the trade action:

  • South Korea’s LG, which was hit by the 30% duties on washing machines, pared losses on Tuesday trading; China’s biggest solar panel maker, JinkoSolar, said the outcome is “better than expected”
  • The share of GDP of these types of household equipment is “essentially 0.1%, at maximum”; the economic impact from tariffs is not material: Trinh Nguyen, former World Bank consultant and senior economist at Natixis SA
  • Analysts say the only cause for concern is whether or not this is a sign of more things to come
  • Whether or not China responds with a warning shot to dissuade more significant action is also in question

China has plenty of options to retaliate:

  • Specific US companies, industries at risk for retaliation include Apple, Boeing and soybean exports
  • China has long history of tit-for-tat retaliation in trade disputes
  • Nationalist tabloid Global Times said China should not let the US get away without paying a price for “making unreasonable demands”; China can sell US Treasuries, restrict imports on agricultural products, machinery and aircraft, the paper warned

3 replies on “Trump’s first trade salvo a timid one”

Comments are closed.